
THIS ISSUE: 05 Jun - 12 Jun
Welcome to this week’s Trade Tatler, where we bring you leadership shifts at SPAR and Country Road and look at Amazon’s push towards becoming an ever-greater competitor to the likes of Pick n Pay and Checkers. We also wish to take a moment to reflect on Youth Day and how the occasion gives us reason to consider the role young people are already playing in shaping South Africa’s economy, including the evolving retail landscape. We invite you to read our article on the topic here. Enjoy the read and the long weekend.
YOUR NUMBERS THIS WEEK
RETAILERS AND WHOLESALERS
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SPAR MaxD’s
A leadership shuffle at SPAR, which announced this week that CEO of SPAR South Africa, Max Oliva, will be stepping down from his role after 30 years with the business. Over that time, Oliva has held several senior leadership positions across the Group, culminating in his latest role. To ensure continuity, Group CEO Angelo Swartz will assume operational leadership of the Southern Africa region, fully supported by the Group’s experienced Exco. “It has been an honour to serve SPAR for the past three decades. While this was not an easy decision, I am confident that the business is in capable hands,” said Oliva on the transition. According to the Group, the new structure will enable Swartz to focus his attention on the Southern Africa operations and ensure continued progress on its key priorities. Oliva leaves SPAR to take the top spot at McDonald’s South Africa, assuming his position as CEO on 1 July.
Comment: Transitions aplenty at SPAR, and the changes keep coming. Wishing Mr Oliva all the best in his new role, and Mr Swatz in keeping the SPAR ship steady.
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Amazon Amaz’n race
Watch out Sixty60, asap! and DeliverD... one year after arriving on our shores, Amazon is creeping ever deeper into our traditional retailers’ territories by introducing three essential categories – groceries, pet food, and vitamins and supplements – as part of the online giant’s push to become a one-stop shopping destination for South Africans. “The initial customer response has been extremely positive, particularly for our bulk buying options and multipack savings across all three categories,” says Amazon South Africa’s retail head for consumables, Philile Mabolloane. Bulk delivery of groceries is where Amazon may have the edge, according to those in the know, although Shoprite, not one to be left behind, probably anticipated this with the launch of its Checkers Sixty60 Hyper service in Jan. The big brand names now available on Amazon include the likes of Nestlé, Red Bull, and Starbucks, and proudly South African favourites Beacon, Simba, and Koo. As for pets, Amazon says that it “has seen particular demand for premium pet nutrition brands and specialty formulations,” which the e-tailer is only too happy to provide.
Comment: Never a dull moment in FMCG. More competition and options can only be a good thing for shoppers, and a way to keep those selling to them honest.
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In Brief Cheap as chips
Pick n Pay marked World Environment Day last week by celebrating its Reverse Vending Machines (RVM) customer recycling initiative, which since its launch in 2018, has diverted 1.1 million plastic and packaging recycling items from landfills. The 39 machines located at stores across the country accept recyclable items such as plastic bottles, aluminium cans and glass containers, while rewarding customers for their efforts with Smart Shopper points. “Ending plastic pollution isn’t a one-day project. But this initiative proves that scalable, community-led environmental solutions work,” said Riley van Rooyen, sustainability lead at Pick n Pay. Next up, Makro has reduced the price of 100 basic food items to the lowest price it can offer for three months. The price roll-back includes South African essentials such as Black Cat peanut butter, Crosse & Blackwell mayonnaise and Handy Andy cream, but also 28 M Brand products, Makro’s own private brand. And finally, Woolies-owned Country Road Group CEO Raju Vuppalapati is stepping down from his position after four years in the role following “internal culture issues” and a lacklustre performance in the Aussie business. He will remain with the company until the end of August or “until such time as the new CEO is appointed”.
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International Retailers I, Robot. U, Watch Out
We lead our round-up of international retail news with Sainbury’s, which has announced that it will be trialling a “new cutting-edge technology” known as electronic shelf labels. Oh hang on… some of our retailers have been using ESLs for around 15 years already, you say? So not so “cutting-edge” after all. Moving swiftly along but still in the UK, retailers Morrisons, Asda and Sainsbury’s are under fire from the British meat industry and farmers for stocking cheaper imported chicken and beef from countries such as Australia, Poland, and Uruguay. It’s a complex conundrum, isn’t it – provide constrained shoppers with better value, or support local despite the higher prices? Uruguayan sirloin and ribeye coming in at 20% cheaper than the UK equivalents are pretty hard for Mr and Mrs Punter to ignore, after all. And finally, have a look at this intrepid little guy roaming the perilous parking lots of Walmart. These security bots, known as “Lot Cops” of “Parker” robots, are part of a new security initiative being tested by the retailer. Equipped with cameras and sensors for surveillance, the bots are designed to monitor the area and deter would-be criminals. Reactions among shoppers range from mild amusement to flat-out criticism, with concerns being raised that the bots will contribute to rising prices and job losses.
MANUFACTURERS AND SERVICE PROVIDERS
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Premier A rising performance
A positive results season at Premier, owner of Snowflake, Blue Ribbon, Iwisa, Manhattan and Lil-lets, to name but a few of its brands. Group revenue for the year to end March grew +7.0% to R19.9bn, supported by +5.7% revenue growth in the ‘Millbake’ (bread, maize and flour) division thanks to higher sales volumes and production upgrades, as well as its ‘Groceries and International’ arm up +13.3% with strength seen in home and personal care products. Looking ahead, the Group expects prices of maize and wheat to come down, which will enable it to pass on cost savings to consumers. Premier also says that it will continue to look for acquisitions and consolidation opportunities to broaden its footprint in the industry, and its two-year CAPEX project to refurbish its Aeroton bakery in Jozi is expected to further enhance efficiencies and step-change bread quality in the region.
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Oceana Rolling in the deep
In an industry that is as changeable as the seas, Oceana reported a moderate set of interims this week, with revenue up just +2.9% to R5.2bn, and growth offset by lower sales pricing in fishmeal and fish oil. Lucky Star delivered a strong performance, however, with sales volumes up a record-breaking +5.0% for the period, thanks to South Africans’ steady demand for affordable protein at shop shelves. Its US-based Daybrook fishing business had a rough time of it because of a drop in fish oil pricing this year compared to the record highs of the first half last year, caused by the anchovy fishing season being cancelled in Peru in 2024. The Peruvian anchovy resource has since recovered, leading to normalised prices and a tougher time for the Daybrook bottom line. The outlook towards H2 is variable, due to the softer global prices for fishmeal and fish oil, while Lucky Star’s strong inventory position will help the business cut back on short-term borrowings through cash generation.
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In Brief We belong together
Move over chocolate and wine pairings… here come doughnuts and body lotion? Because we all love a glazed look as much as a glazed doughnut. Vaseline and Krispy Kreme seem to think so, teaming up in a campaign centred on the latter’s new formula designed to deliver a “glazed skin” look, paired with Krispy Kreme’s iconic glazed doughnuts. The celebs featured in the campaign are South African actress and influencer, Linda Mtoba and oh-so-smooth fashion designer Rich Mnisi. This isn’t the first time personal care has been paired with food, of course. Remember Woolies Chuckles’ body butter, scrub and body wash launched a few months back? And let’s not forget Chupa Chups’ hand and nail cream, and lip balm. Still with sweet treats, Oreo is stepping out with a new limited edition pack of its famous cookies that will help us find the answers to all those big questions. Each biscuit in the ASK OREO pack is embossed with typically Mzansi words and responses. Should I catch that movie tonight? 100%. Should I ask my boss for a raise? Fo Sho. (Not happening. Ed.) “With ASK OREO, we’re inviting Mzansi to lean into our playful spirit and let the cookies take the wheel. It’s a delicious way to make decisions without any of the stress. Just pull a cookie and let them decide!” explains Simone Van Zyl, Biscuits Category Lead for Mondelez. Moving on to a less cheerful story, House of Natural Butters, the peanut butter manufacturer whose products had to be recalled over a year ago due to high levels of aflatoxins, has been fined R500,000 for the incident that led to Pick n Pay and Dis-Chem having to pull their private brand peanut butters off their shelves. “It is incumbent upon suppliers of food products in the South African market to ensure strict compliance with food safety regulations and the Consumer Protection Act,” said the National Consumer Council in a statement on the matter.